INSIGHT: Controversial EU Packaging and Packaging Waste Regulation approaches adoption

LONDON (ICIS)–Details of the provisional agreement on the Packaging and Packaging Waste Regulation (PPWR) have been published, containing a number of wide-ranging elements which will reshape the packaging sector across the next two decades.

The regulation is now reaching its final stages but has faced a fraught journey through the various legislative chambers of the EU and has remained divisive among both legislators and the markets.

Under the provisional agreement the regulation will introduce:

• Mandated packaging recyclability
• Minimum recycled content and reuse targets across packaging – albeit with potential derogations based on availability of recycled material
• Mandatory deposit return schemes (DRS) and separate packaging collection targets
• New reporting and labelling obligations
• The extension of extended producer responsibility (EPR) schemes
• A restriction on the placing on the market of food contact packaging containing per- and polyfluorinated alkyl substances (PFAS) above certain thresholds
• A restriction on plastic collation films except for transportation purposes
• The possibility of bio-based plastic contributing to recycling targets
• The allowance of imports to count towards recycling targets provided they are of similar quality as domestic material and have been separately collected

The Committee of the Permanent representatives of the Governments of the Member States to the European Union (Coreper) endorsed the Packaging and Packaging Waste Regulation on 15 March following amendments to the provisional agreement reached by the EU Parliament and EU Council (but not endorsed by the EU Commission) during the trilogue negotiations.

The European Parliament Committee on Environment, Public Health and Food Safety (ENVI) endorsed the provisional agreement on 19 March.

NEW RE-USE TARGETS
By 1 January 2030, 40% of most transport packaging used within the EU – including e-commerce – will need to be reusable and ‘within a system of reuse’. This includes pallets, foldable-plastic boxes, boxes, trays, plastic crates, intermediate bulk containers, pails, drums and canisters of all sizes and materials, including flexible formats or pallet wrappings or straps for stabilisation and protection of products put on pallets during transport.

From 2040 this will increase to 70%.  Some players said that this amounted to a defacto ban on flexible plastic transport packaging because of the difficulty in reaching the reuse target.

By 2030, 10% of grouped packaging boxes for stock keeping or distribution will need to be re-usable.

Controversially, cardboard boxes will be exempt from these reuse targets, which could see an increased shift to the material.

Dangerous goods transport packaging, large scale equipment transport packaging, and flexibles in direct contact with food and feed as defined in Regulation (EC) No 178/2002, and food ingredients as defined in Regulation (EU) No 1169/2011 will also be exempted.

By 2030, distributors of alcoholic and non-alcoholic beverage sales packaging will need to meet a 10% reuse target, which will increase to 40% by 2040. Some classes of alcoholic beverage, including highly perishable alcoholic beverages will be exempted.

RECYCLABILITY AND REUSE
By 2030 all packaging must be recyclable or reusable. To be classed as recyclable, packaging must be:

• Designed for recycling
• Separately collected
• Sorted in to defined waste streams without affecting the recyclability of other waste streams
• Possible to be recycled so that the resulting secondary raw materials are of sufficient quality to substitute the primary raw materials

Packaging recyclability performance grades are to be established by packaging category and classified as grades A, B or C. After 1 January 2030 any packaging that falls below grade C will be restricted from sale in the market. After 1 January 2038 packaging classified below grade B will be banned from sale in the market.

Under the legislation, along with design for recycling assessments from 2035 an additional assessment will be added based on the weight of material effectively recycled from each packaging category – with the packaging categories under the design for recycling assessment established in Article 6 paragraph 6 of the provisional agreement.

The EU Commission will be given power to adopt delegated acts to establish the detailed criteria for the design for recycling criteria under the packaging categories, with criteria to be set-out by 1 January 2028.

Also from 2035, a requirement that material be ‘recycled at scale’ will be added to the recyclability assessment, with the EU Commission able to amend the thresholds.

The definition of packaging waste recycled at scale requires separate collection sorting and recycling of material across the EU as a whole (including of waste exports) in installed infrastructure for each of the packaging categories of at least 55% for all materials except for wood which requires at least 30%.

Assessments of recyclability will include the impact on recycling systems of the inclusion of things such as barriers, inks and labels.

By the end of 2026 the EU Commission will be required to prepare a report on ‘substances of concern’ that might negatively affect recycling or reusability, with additional restrictions added for those substances under recyclability assessments.

Member states will be able to request the EU Commission consider restricting substances they consider detrimental to recycling. Within 7 years from the date of application of the regulation, the Commission will be required to evaluate whether the design for recycling requirements have contributed to minimising substances of concern.

A five-year exemption on meeting recyclability targets will be given for innovative packaging, along with an exemption for medical goods and medical goods packaging, dangerous goods and packaging for food-contact material specifically made for infants.

Sales packaging made from lightweight wood, cork, textile, rubber, ceramic or porcelain is also expected to be exempted from most of the recyclability requirements.

MINIMUM RECYCLING TARGETS FOR THE PACKAGING CHAIN
Under the provisional agreement, from 1 January 2030, or three years after the introduction of the related implementing act (whichever is later) all plastic packaging placed on the market in the EU must include a minimum percentage of recycled content from post-consumer waste – by weight – of:

• 30% for contact sensitive packaging (this is generally packaging that comes into contact with food or medical supplies), excluding single-use bottles made from polyethylene terephthalate (PET) as the major component
• 10% for contact sensitive packaging made from plastic materials other than PET, except single use plastic beverage bottles
• 30% for single use plastic beverage bottle
• 35% for all other packaging

By 2040, this will increase to:

• 50% for contact sensitive plastic packaging made primarily from PET, except for single use plastic beverage bottles
• 25% for non-PET contact sensitive plastics, with the exception of single use beverage bottles
• 65% for single use beverage bottles and all other plastic packaging

The recycled content targets will allow the use of material from ‘third countries’ – those outside of the EU – the allowance of which has been one of the most contentious and heavily lobbied parts of the bill on either side of the argument.

Material from outside of the EU will need to have been separately collected, and have equivalent specification to the requirements listed in the PPWR, the Waste Framework Directive (2008/98/EC), and the Directive on the reduction of the impact of certain plastic products on the environment ((EU) 2019/904).

Medical packaging, transportation of dangerous goods, compostable plastic packaging and food packaging for infants and young children will be exempt from the recycled targets.

The Commission is obliged to adopt implementing acts establishing a methodology for the calculation and verification of these recycled percentages by 31 December 2026.

The Commission will be able to amend the targets based on “excessive prices of specific recycled plastics” and on the grounds that the amount of recycled content would pose a threat to human health or result in non-compliance with Regulation (EC) 1935/2004 – or to any plastic part representing less than 5% of the total weight of the whole packaging, which would typically include things such as functional barriers.

By 1 January 2028 the Commission will be required to assess the need for further exemptions from recycled content targets for specific plastic packaging based on a lack of suitable recycling technologies. It will have the power to introduce implementing acts to amend the recycled content targets based on those assessments.

Member states will also be able to exempt economic operators from reuse targets for 5 years as long as:

• that Member State has reached 5 percentage points above the 2025 recycled targets for recycling of packaging waste per material
• It is expected to reach 5 percentage points above the 2030 target (as assessed by the EU Commission)
• It is on track to meet waste prevention targets under the PPWR
• It has reached a 3% waste prevention by 2028 compared with a 2018 baseline
• The economic operators have adopted a corporate waste prevention and recycling plan that contributes to achieving the waste prevention and recycling objective

The five year exemption can be renewed by Member States provided the conditions remain filled. This would appear to lead to the prospect of uneven trading conditions across the EU.

The targets will be calculated by year and manufacturing plant.

The 2030 targets under the PPWR will replace the targets set out in the Single Use Plastics Directive (SUPD) from 2030, but the pre-2030 targets in the SUPD will remain.

EPR schemes will be extended under the legislation and must be set-up to ensure that fees to producers (or those with producer responsibility in the case of imports) are sufficient to cover the ‘full waste management’ cost of packaging waste, but actual fees are not stipulated in the legislation.

The provisional agreement states that players contributing to EPR schemes should be given priority access at market prices to recycled material corresponding to the amount of packaging placed in a Member State by each individual economic operator.

SINGLE-USE PLASTICS, PACKAGING WASTE TO LANDFILL, AND PFAS BANS
There will be further bans on single-use plastics introduced by the PPWR, which remain broadly inline with those proposed in the EU Council’s bargaining position.

Significantly, for the recycled low density polyethylene (R-LDPE) flexible market this includes a ban on plastic film wrap grouping bottles, cans, tins, pots, tubs, or packets together in multi-packs at point of sale, but will not include wrap used for business-to-business distribution. This could also impact on pyrolysis-based chemical recyclers because post-consumer flexibles have been identified by the sector as a potential key feedstock source.

The agreement also includes a ban on food-contact packaging containing PFAS above certain thresholds.

There will also be a restriction on sending packaging waste that can be recycled to landfill or incineration, which could result in a higher sorting requirements and costs for waste managers.

BIO-BASED MATERIAL
By three years from the entrance in to force of the PPWR the EU Commission will be obliged to review the state of technological development and environmental performance of bio-based plastic packaging.

Following this, the Commission will be required to bring forth legislative proposals for targets to increase the use of bio-based plastics in packaging, this will include the possibility of bio-based material contributing to recycling targets for food-contact material where recycled material is not available. This is likely to impact most heavily on the polyolefins and polystyrene sectors.

CHEMICAL RECYCLING
The original commission draft appeared to clarify and support the use of chemical recycling as counting towards the targets as long as its end use is not for fuel or backfill.

In a blow for chemical recyclers, however, the wording around definition of recycling has been removed, and now refers back to Directive 2008/98/EC which forms the basis of the majority of EU recycling legislation definitions.

Directive 2008/98/EC defined recycling as “any recovery operation by which waste materials are reprocessed into products, materials or substances whether for the original or other purposes. It includes the reprocessing of organic material but does not include energy recovery and the reprocessing into materials that are to be used as fuels or for backfilling operations.”

This has left the legal status of chemical recycling uncertain, particularly for pyrolysis – the dominant form of chemical recycling in Europe – where mixed plastic waste is commonly converted to pyrolysis oil – a naphtha substitute – before being reprocessed into recycled plastics.

MEMBER STATE TARGETS AND DEPOSIT RETURN SCHEMES (DRSs)
Member state targets and obligations to implement DRSs remain broadly the same as in the EU Council’s bargaining position paper.

The exception is that the figure on the collection figure for member states to exempt themselves from a DRS scheme has been increased to 80% by weight of applicable packaging placed on the market for the first time in 2026, up from 78% in the EU Council’s bargaining position.

The legislation’s passage through the EU has been fraught, with the EU Commission objecting to the provisional agreement between the Parliament and the Council, and with widespread talk circulating in the run up to the vote that the members would not support it at Coreper.

These factors are understood to be behind the last minute amendments. The regulation now faces a final approval vote in the EU Parliament’s April plenary session, if it passes that vote it will be adopted in to law.

Insight by Mark Victory
Additional reporting by Matt Tudball

Clarification: recasts detail in 51st paragraph